Real-World Economics Review

from Asad Zaman Classical Physics, the model for modern economics, was based on the ideas of stability and permanence of astronomical orbits; see Mirowski (1992). Deeper examination of astrophysics led to the replacement of this view by big bang which gave birth to the universe, and increasing entropy, which will lead to its heat death. “Equilibrium” just appears as a temporary and local phenomenon in an evolving and chaotic universe. Complexity economics takes non-equilibrium seriously....

from Peter Radford A week or so ago I wrote that I was in the midst of reading Robert Skidelsky’s book “What’s Wrong With Economics”.  His account is complete and balanced, he clearly has a great deal of respect for the discipline, but his critique is well worthwhile the time it takes to read.  At the end the reader might well ask what is left of the mainstream line of theorizing after all the holes Skidelsky punches through it. The problem that many of us might have is that this ground...

from Dean Baker We know that the economy is likely to get worse in the immediate future as the pandemic is spreading out of control in most parts of the country. However, the latest data on average weekly hours indicates we may be facing a longer-term issue that has not generally been anticipated. In a normal recession, we see both a loss of jobs and a reduction in hours for those who managed to keep their jobs. The shortening of hours is a better way for employers to deal with reduced...

December 17th, 1940-November 23rd, 2020

from Lars Syll Page after page of professional economic journals are filled with mathematical formulas leading the reader from sets of more or less plausible but entirely arbitrary assumptions to precisely stated but irrelevant theoretical conclusions … Year after year economic theorists continue to produce scores of mathematical models and to explore in great detail their formal properties; and the econometricians fit algebraic functions of all possible shapes to essentially the same...

from Dean Baker It’s good to see the New York Times making the case for higher wages in an editorial. Unfortunately, they get much of the story confused. First off, the essence of the case is that higher wages will lead to more consumption, which will spur growth. This is true, but higher pay is not the only way to generate more demand. We also get more demand with larger budget deficits, lower interest rates, and a smaller trade deficit. But that is the less important problem with the...

Richard Dean Baker - Dec. 17th, 1940-Nov. 23rd, 2020

Immigration is a hotly debated issue in the EU. To be more precise: immigration from the ‘south’ is hotly debated. Immigration from the East is much more important and increasing. Some facts: Immigration into the EU is increasing and has been increasing for quite some time (the ‘first residence permits’ mentioned in the graph and the quote are not permanent residence permits)This is to a considerable extent caused by immigration into Poland from countries like Ukraine and Belarus....

from Lars Syll To be ‘analytical’ and ‘logical’ is something most people find recommendable. These words have a positive connotation. Scientists think deeper than most other people because they use ‘logical’ and ‘analytical’ methods. In dictionaries, logic is often defined as “reasoning conducted or assessed according to strict principles of validity” and ‘analysis’ as having to do with “breaking something down.” But that’s not the whole picture. As used in science, analysis usually means...

from Asad Zaman Eurocentric history portrays the West as advanced, rational, scientific, and democratic, while the East is superstitious, unscientific, autocratic, and backwards. This poisonous philosophy enabled the incredibly brutal and ruthless violence required for the conquest of the globe, and continues to sustain extremely exploitative economic systems. A partial antidote is World Systems theory which portrays all human beings, nations, and cultures, as joint participants in...